Government committed to slash business costs

This year, the Vietnamese Government intends to further slash business costs and regulations as well as fostering co-operation between domestic enterprises and their foreign direct investment (FDI) counterparts.

The efforts aim at improving competitiveness and sustaining socio-economic achievements made last year, said Prime Minister Nguyễn Xuân Phúc in an official response to queries from Hà Nội’s National Assembly deputies.

In a resolution made on January 1, the Government listed major tasks and solutions to implement socio-economic development plan in 2018.

They include, firstly, reforming administrative procedures related to land, taxation, customs, agriculture, rural areas, information technology applications and start-ups.

Secondly, making robust changes to the business environment to enhance competitiveness – and to regularly hold dialogues with enterprises to seek feedback.

Thirdly, taking drastic measures to develop enterprises, promote innovation and start-ups; continue perfecting mechanisms and policies on business investment, support small and medium-sized enterprises, co-operatives and house-hold enterprises; and creating a fair environment.

The PM also reiterated that the Vietnamese government has for long recognised the need for enhancing ties between domestic enterprises and FDI enterprises, evidenced by Resolution No 103/NQ-CP issued in 2013 delineating guidelines for attracting, using, and managing of foreign investment.

The Government wants to make sure that the success of FDI enterprises, cited as the driver of growth for the Vietnamese economy, will cause a positive chain reaction, raising competitiveness and the capacity of domestic enterprises.

According to the Government, there have been promising gains made from ties between FDI enterprises and domestic companies. Some FDI enterprises have put in place plans to co-operate and support Vietnamese enterprises to develop supporting industries.

On the other hand, he said, Vietnamese enterprises had proved capable of entering the value chain of big name multi-nationals like Samsung and LG. In 2014, there were only four Vietnamese suppliers to Samsung, now there have been 29 direct suppliers and still counting.

According to the latest Provincial Competitiveness Index (PCI) for 2016, 14 per cent of private enterprises have FDI customers operating in Việt Nam. Statistics show that at least 26.6 per cent of FDI enterprises’ input was produced and purchased in Việt Nam.

PM Phúc noted that these figures signify positive improvements in the co-operation between FDI and domestic enterprises over time, however, they “could be higher”.

He said one of the chief reasons for this result could be weak implementation of the Government’s policies. Domestic enterprises showed insufficient efforts to upgrade their infrastructure, technology, and improve their capacity to produce higher quality products and services.

In addition to attracting investment from multinational corporations, the PM said attention should also be paid to pulling in competitive suppliers who could join the production chain and create high value-added production in sectors that domestic enterprises were incapable of meeting the demands.

 

Source:
Government committed to slash business costs

About the author  ⁄ AmCham Vietnam

AmCham is an independent association of companies with the objective of promoting trade and investment between Vietnam and the U.S. With two chapters, one in Ho Chi Minh City and one in Hanoi, our membership of 700 companies and 1,500 representatives is unified by a commitment to promote trade and investment between Vietnam and the United States.

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